Acounting for giveaways

CMS
CMS Registered Posts: 21 Dedicated contributor 🌟 🐵 🌟
I have a question for anyone who can answer it. If a company was purchasing items to use as a giveaway as part of a promotion am I correct in assuming that the cost to purchase them is simply written off to the P&L. It wouldnt go into stock or would it? Any imput would be appreciated.

Thanks
CMS

Comments

  • T.C.
    T.C. Registered, Tutor Posts: 1,448
    Advertising expense?
  • CMS
    CMS Registered Posts: 21 Dedicated contributor 🌟 🐵 🌟
    Its not so much advertising it is more a freebie, like a free badge if you buy something else. At first I thought it would be a simple write off in one go but now I am thinking that it should go on the balance sheet and then written off as they are used up?

    CMS
  • RAS
    RAS Registered Posts: 124 🎆 🐘 🎆
    If they are to be given away as part of a promotion, I would write the cost off to the p/l under advertising and promotional.
  • CMS
    CMS Registered Posts: 21 Dedicated contributor 🌟 🐵 🌟
    Cool, that looks like the best option. Thanks for your help :-)

    CMS
Privacy Policy